Monday, May 16, 2011

MCALLEN, Texas -- Dozens of Mattel Inc. employees were on their way to another day of work making Power Wheels in Mexico's industrial heartland when gunshots erupted around them and a grenade ripped into one of their buses, killing one worker and wounding five.

The battle between drug traffickers and the army near the city of Monterrey last week was the sort of violence that is frightening U.S. companies away from new investments south of the border, where organized criminals are increasingly turning to kidnappings, extortion and cargo thefts despite a government offensive against drug cartels.